Consumer response to value propositions of electricity platforms: A case study of Switzerland’s first local energy market

Abstract

Local energy markets may facilitate the integration of an increased share of renewable sources into the electricity system by providing distributed network stability and an alternative to investments in centralised storage capacity. Market imbalances caused by the fluctuating nature of renewable energy generation could be stabilised in a decentralised manner by matching demand with supply from local producers. With regional satisfaction of consumer needs, local energy markets may provide an alternative to centralised adaptations of the grid infrastructure otherwise required to meet an increased demand variability and instead pose a smoother introduction of a growing supply from sustainable energy sources. Achieving distributed stability in markets with volatile electricity supply requires consumption flexibility among consumers. Depending on the availability of local energy, the time of preference for electricity usage might need to be compromised. The willingness to shift electricity load among residential households may be incentivised with value-adding benefits and features of energy offerings. An increased variety of consumer preferences could facilitate the matching process of complementary needs in a local energy market, but may also require business developers and policymakers to use a segmented approach to their marketing and communication strategies. This study explores the consumer response to value propositions of electricity platforms with real-time feedback and peer-to-peer trading. Adoption intention, willingness to load shift and perceived value is tested for eight different platform offerings and measured among residential households in Walenstadt, Switzerland. The Quartierstrom field experiment, simultaneously ongoing in the same city, is used as a case study. The results show that the consumer response is more positive to platforms with real-time feedback than to those with peer-to-peer electricity trading. This might inform governance structures in market designs as well as automation strategies for local exchange. Electricity platforms with financial and non-financial value propositions can not be concluded to cause differences in consumer response. The inconclusiveness might support the need for a segmented marketing approach, and potentially the existence of contrasting desires despite small market sizes. The case study analysis implies the existence of volunteer selection bias in the results from the Quartierstrom field test. When compared to a larger Walenstadt sample, the characteristics of the Quartierstrom participants indicate that the group is more open to technological innovation and more affluent than the intended population.